The head of recently bankrupted Italian luxury sports car maker De Tomaso has been arrested following an investigation into the company’s alleged misuse of more than $9 million of public funds.
Italian officials opened an investigation into the company owned by chairman Gian Mario Rossignolo earlier this year to understand how De Tomaso was using its millions of euros of public funding.
The funds were intended to help resurrect the De Tomaso brand, which lay dormant for five years after its initial bankruptcy in 2004.
Rossignolo – a former Fiat executive and CEO of Lancia in the late-1970s – had plans for the company to produce up to 8000 cars per year, starting with the SLS sedan, which made its world premiere in Italy in February 2011.
According to Reuters, De Tomaso received funds from the European Union and the region of Piedmont to help retrain 1000 workers in preparation for the start of production.
But with the workers in a state of ‘temporary layoff’ since 2010, Piedmont asked for a refund of its five million euro ($6 million) investment in May, leading Rossignolo to file for bankruptcy after failing to secure adequate funding.
Rossignolo, the company’s human resources manager and another financial employee were placed under house arrest earlier this week as investigators suspect they may have used false bank details to keep some of the funds for themselves.
De Tomaso was founded in Modena, Italy in 1959 by racing driver Alejandro De Tomaso. The company produced some iconic sports cars in the 1970s and 1980s, headlined by the Pantera, which was powered by an Australian-produced Ford 351 Cleveland V8.